In the 80's one can earn interests of between 4 - 10% easily, so the CPF rates are correspondingly higher. The charts cannot be seen in isolation but against the economic situations then. In 1987 when rates & prices were at their peak, one of the world's worst economic crisis hit, what we remember as Black Monday
http://www.thebubblebubble.com/1987-crash/. That's why interest rates dived, plunged to rock bottom & never fully recovered as another 10 years later in 1997, another bubble which developed burst, not forgetting the Dot-com bubble & collapse of Barings Bank earlier.
Look at the banks current FD (not SA) rates
0.05% per annum, not even one or half a percent!. I put $100K in the bank for a year, what I got was
>$ 4 per month !!! Against this, how does the CPF rates look, can we do better? Why the rates are so very very low & is it good or bad, go ask the economic gurus...
As to the minimum sum, its just the minimum. If we have to rely, depend on it for survival, then the situation is really bad if not critical. Some peoples' cars cost more than that! The reality is we are trying to use yesterday's money to pay for today's cost of living. This has always been a problem & there is so simple solution. If one is earning $300 in the 80's as compared to $2K today for what are the same jobs, even if one save 50% of his pay then & with the kind of pay rise one gets over the years, it will never be enough... That's why we need to accumulated other assets besides the CPF, like in insurance policies etc The minimum sum is like the last safety net & have to change with the cost of living. No one like to be told by another, esp the Govt, what to do with HIS money. But the harsh reality is such with forced savings schemes unless the state bail the people out when they run out of money.
